Mattoon v. McDaniel

• Decision Date: 31 July 1863
• Citation: 34 Mo. 138
• Parties: WILLIAM MATTOON, Defendant in Error, v. WILLIAM G. MCDANIEL, Plaintiff in Error.
• Court: Missouri Supreme Court

34 Mo. 138

WILLIAM MATTOON, Defendant in Error,

v.WILLIAM G. MCDANIEL, Plaintiff in Error.

Supreme Court of Missouri.

July Term, 1863.

Merryman, for appellant.

Did the answer present a defence to the cause of action? As to the note assigned after maturity, we think there can be no doubt under the act. (R. C. 1855, p. 286.) If the Parkville and Grand River Railroad Company passed and received, in this State, bank notes and other paper currency of a less denomination than five dollars, and passed and received, in this State, suspended and non specie-paying bank notes, by the 9th section of that act it forfeited its right to recover on any debt due the company. (Christian University v. Jordon, 29 Mo. 68.)

It may be remarked that the court below did not doubt the legality of the defence, if the suit had been brought in the name of the company; but such a defence could not be made to an assignee of the note. One of the notes was assigned after due, and the assignee took it with all the equities attached to it in the hands of the payee; such equities are such as are connected with the note itself. We admit that an independent transaction between the original parties could not be set up, but this defence is connected with the note itself; then if the payee could not recover, the assignee cannot; and if the defence could not be made against an assignee of a note, the entire law in relation to banking currency would be nullity on the statute book, for the payees could avoid its affect by a transfer of the note. (See the case of Gullett v. Hoy & Orton, 15 Mo. 399; Baker v. Brown, 10 Mo. 396; 16 Mass. 473; 8 Pick. 342; 3 John. Ch. 425; 13 John. 9; Story on Bills, § 220.)

Two of the notes were assigned before maturity, and to these appellant charges in his answer that respondent, and not the company, procured the execution of the note by the appellant, and respondent did it with a knowledge of the fact that said road company could not recover on any debt due it. He further charges that respondent knew, at the time he received the notes, that said company could not recover on the same. He further charges that respondent received the notes to avoid, if possible, the defence of appellant and with knowledge of all the facts, and the same was done to evade the forfeiture of the assignor's right to recover.

The assignment of the notes to respondent under the circumstances was a fraud on the obligor, and if respondent received the notes with knowledge of the fact that appellant had a good defence to them, he stood in the same condition that the obligee stood, and the fact of their being negotiable does not avail. (10 Mo. 399; Story on Bills, § 187, 184, 194; 8 Wend. 437; 15 John. 270; 6 Tenn. 61.)

Clough, for respondent.

I. A forfeiture of the charter can only be plead by a creditor in a suit brought by the company itself. The statute on illegal banking, &c., referred to and relied upon by defendant, does not contemplate an entire forfeiture of the charter of a company, so as to impart notice to everybody, other than by the usual proceedings of “ quo warranto,” but does authorize the statute to be plead in any particular case where the company itself is the party litigant, which plea, when substantiated, operates as a forfeiture only “ pro hac vice. ” (Christian University v. Jordon, 29 Mo. 68.)

DRYDEN, Judge, delivered the opinion of the court.

This was a suit by Mattoon, the endorsee of three negotiable promissory notes against McDaniel, the maker. The...